For immediate release
21 November 2024
ADFVN PLC
("ADVFN" or the "Company")
Audited Results for the year ended 30 June 2024
The Board of ADVFN announces the audited annual results for the year ended 30 June 2024. The Annual Report and Accounts will shortly be sent to shareholders and will be available on the Company's website, http://www.advfnplc.com. A copy of this announcement is also available on the Company's website, http://www.advfnplc.com.
For further information please contact:
| ADVFN plc Amit Tauman (CEO) | +44 (0) 203 8794 460 |
| Beaumont Cornish Limited (Nominated Adviser) Michael Cornish Roland Cornish | +44 (0) 207 628 3396 |
| Peterhouse Capital Limited (Broker) Eran Zucker Lucy Williams Rose Greensmith | +44 (0) 207 469 0930 |
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. The person who arranged for the release of this announcement on behalf of the Company was Amit Tauman, Director.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.
Chairman's Statement
This year has been pivotal for ADVFN, as we continue to strengthen our foundations for future success.
The Board remains robust, with the addition of a new, highly experienced member, further enhancing our finance and business development team.
Whilst there remain headwinds in the industry, we remain confident in our approach. The company continues to innovate and develop state-of-the-art technologies, in part powered by AI, which empower retail investors and position ADVFN at the forefront of financial technology.
We are resolved to steering the company through these challenges, always aligning our long-term vision for growth with shareholders' best interests.
Lord Gold
Non-executive Chairman
Chief Executive's Statement
Dear Shareholders, Employees, and Stakeholders,
I am pleased to present to you the annual report for ADVFN PLC (ADVFN) ("the Company") and its subsidiaries (together "the Group") for the fiscal year 2023-2024.
Our mission at ADVFN is to empower retail investors by connecting them together in real-time, providing them with the tools and insights they need to make informed investment decisions. Our vision is to become the leading platform for trading ideas and live discussions, fostering a dynamic and engaged community of investors. Our aim is to be positioned at the forefront of the financial technology market. With our deep understanding of market dynamics and our commitment to innovation, we are equipped to deliver cutting-edge products and offerings.
This year has presented numerous challenges and opportunities for ADVFN. Our revenues for this year stood at £4.4 million, reflecting the impact of the downturn in advertising sales and strategic decisions to wind down certain components of our site. However, we successfully reduced our net loss from £2.2 million to £918,000, meeting our cost reduction targets.
This year has been marked by several key milestones and innovations:
· Partnerships: We established a new relationship with our Italian partners, Prodesfin, strengthening our presence in the Italian market.
· Platform Revamp: We revamped our website, www.advfn.com, and initiated the rollout process to other countries, enhancing user experience and engagement.
· New App Launches: We launched two new apps, which are expected to have a positive impact and are paving our way to increase our revenue stream. Additionally, we plan to open up Android subscription purchases and integrate an ad network within our apps, further bolstering our revenue and expanding our customer base.
· AI Intelligence and ADVFN Live Chat: We are particularly excited about the release of AI Intelligence and the ADVFN Live Chat platform. AI Intelligence utilizes the latest GPT-4 and other large language models (LLMs) to transform how our users consume financial data, providing advanced insights and analytics that empower investors to make smarter decisions. For these AI tools, we plan to charge a premium subscription to users, ensuring high-margin revenue streams.
The ADVFN Live Chat platform represents the next generation of ADVFN, connecting users in real-time and sharing trading ideas while leveraging ADVFN market data and tools. This platform is designed to be a cornerstone of our community, enhancing user engagement and collaboration. We plan to start with an advertising model focused on exclusive partnerships and eventually move toward an Investor Relations B2B model, complemented by a premium subscription service. These strategies are designed to diversify our revenue streams and drive sustained growth.
These advancements exemplify our commitment to being a cutting-edge platform. The advertising market continues to experience a downturn, presenting challenges for us, our peers, and the entire space. This business model has proven to be unpredictable, and as such, we are transitioning from a reliance on advertising sales to a more focused products and tools platform.
Looking ahead to 2024-2025, our main focus will be on live discussions, AI, and trading tools. We believe in our ability and skills to achieve our goals in these areas, positioning them as central pillars of our growth strategy, however these will take time to show a significant increase in revenue.
I extend my thanks to our dedicated employees for their hard work and commitment. I also appreciate the continued support of our partners, stakeholders, and shareholders, whose trust and confidence drive us forward.
Sincerely,
Amit Tauman
CEO
20 November 2024
Strategic Report
Financial Overview
The financial reporting framework that has been applied in the preparation of the Group and Company financial statements is the applicable law and UK-adopted international accounting standards.
The loss for the financial year after tax amounted to £918,000 (2023: a loss of £2,169,000).
The business is focused on the new products and services that are being launched in the coming months, with the intention of driving improved subscription numbers in the long term. The Group has been through significant changes in the past 2 years and the impact of these is still being felt.
While the spend was high this year, we are moving toward one of our goals and seeing diminishing expenses and constantly reducing operational costs:
● Operational costs are down on average by 24.6% YoY £5,335k vs £7,076k
● Headcount, reduced by 25% YoY from 31 to 23
ADVFN 2023-2024 financial highlights:
● Revenue was £4.4 million compared to £5.4 million in the prior year.
● Net loss was £0.9 million compared to net loss of £2.2 million in the prior year period.
● Cash and cash equivalents: £4.1 million compared to £5.6 million in the prior year.
The Directors are not proposing payment of a dividend (2023: £Nil).
Business Review
We are working to grow our user base and improve engagement, with the goal of gradually tapping into the potential of these platforms to support our overall business growth.This is why we have been working on a modern, state-of-the-art platform that will enable investors to interact in new ways, with a particular focus on private groups that could evolve into a B2B model for financial influencers. Given the current market landscape, where many competitors are struggling with shrinking gross margins and declining revenues, we anticipate a consolidation within the industry this year, as the space has shrunk since 2020-2022. We see many companies lacking a cash buffer, and with current traffic levels and basic figures, it will be very challenging to achieve profitability. We have strategically positioned ourselves with a strong cash reserve and a clean balance sheet, enabling us to explore opportunities for mergers and acquisitions in the realms of artificial intelligence and community development. These initiatives will help us expand our reach and integrate cutting-edge technologies that align with our long-term goals.
For ADVFN, the unpredictability and decline in the advertising market, which has been significantly impacted, led us to pivot toward enhancing our subscription model, including the development of a community premium model. We plan to grow this model by expanding our product offerings, including AI-driven tools and the introduction of new products including a premium community model. The premium community model will focus on providing exclusive access to private groups, specialized content, and advanced features tailored for our most engaged users, which we hope will host their own private rooms. Our business model hinges on driving traffic to our site, which we then monetize through two primary streams: advertising and subscriptions. On the advertising side, increased user engagement leads to more ad impressions and higher revenue, while our subscription model benefits from robust product offerings and effective funnel management, driving higher conversion rates and recurring revenue (MRR).
We are committed to optimizing our traffic acquisition strategies and refining our product offerings to improve user retention and enhance the overall user experience. By doing so, we aim to boost both subscription conversions and ad impressions, ultimately increasing revenue while maintaining the quality and integrity of the user experience. As we move forward, we will continue to monitor market trends and adjust our strategies to ensure sustainable growth and long-term success.
Summary of key performance indicators
Our approach to Key Performance Indicators (KPIs) is designed to clearly show our stakeholders where our targets, efforts, and priorities lie each year.
For example, last year, we set targets with a focus on operational cost reductions. We are pleased to report that we met our cost-saving KPIs, achieving a reduction that brought our operational expenses to less than £5.5 million.
Given this success, we no longer include cost reduction as a KPI for the upcoming period. We believe that after 18 months of rigorous cost management, we have made the company highly efficient. Each new cost and expense is now closely tied to return on investment (ROI), ensuring that we maintain a lean operation while continuing to scale. We are confident that we can sustain growth without significantly increasing our fixed costs in relative terms.
In the coming financial year, the KPIs we will monitor will shift the focus towards development and growth.
Why These are KPIs:
These KPIs are considered key drivers of our business because they directly impact our ability to generate revenue, retain users, and expand our market presence. By focusing on traffic growth, turnover, community engagement, and subscription premium users, we are addressing the core components that fuel our platform's success. These KPIs are critical as they reflect the health of our business, guide our strategic decisions, and measure our progress toward achieving our long-term goals.
· Traffic Growth: Building on our past efforts, traffic growth remains a top priority. We aim to increase the number of unique visitors to our platform through targeted SEO and marketing strategies, Live Chat, and product offerings. This metric is crucial for our B2C business model as it drives the initial stages of our engagement funnel, setting the stage for increased revenue opportunities.
· Turnover: We anticipate that new products launched will contribute to a substantial increase in turnover, albeit one that will take time to materialize. Our monetization strategies are now optimized, ensuring that the increased user base translates into higher revenue. This includes a focus on attracting premium subscribers, enhancing advertising revenues, and exploring new revenue streams to diversify our income sources.
· Community Engagement: Community engagement is a vital KPI because it reflects the health and vibrancy of our platform. A highly engaged community is more likely to generate valuable content, contribute to discussions, and foster a collaborative environment that attracts new users and retains existing ones. Engaged users are more likely to explore our premium offerings and increase their usage of paid tools and services, driving revenue growth. We measure this through the number of unique posters and the frequency of posts, setting targets to increase these metrics by 20% this year compared to the previous year. These targets are aligned with our efforts to enhance Live Chat, improve SEO, and attract new users.
· Subscription Premium Users: The growth in the number of subscription premium users is a key indicator of our ability to convert free users into paying customers. This KPI is essential because premium subscribers represent a significant and stable revenue stream with higher margins. We will measure this by tracking the growth rate of premium subscriptions, setting a target to increase the number of premium users by 25% compared to the previous year. This growth will be driven by the introduction of new premium features in AI tools, Live Chat, and mobile apps, as well as targeted marketing efforts.
Principal risks and uncertainties
In the dynamic environment in which we operate, we face several principal risks and uncertainties that could impact our business. We have identified key areas where these risks are most prevalent and have developed strategies to mitigate them.
1. Currency Fluctuations: Operating in multiple countries exposes us to the risks associated with fluctuating exchange rates of the Euro, GBP, and the US Dollar. These currency fluctuations can impact our revenues, expenses, and overall financial stability, making it imperative to employ effective currency risk management strategies. To mitigate these risks, we are reviewing our pricing transfer agreements and primarily maintaining most of our revenues in GBP. This approach helps stabilize our financial operations against currency volatility.
2. Ad Networks Industry Volatility: The ad networks industry is witnessing a decline in overall revenue, exemplified by the recent bankruptcy of companies in that space. This is reflected in the Online Ad Revenue Index, which has dropped by 20%. These industry-wide challenges necessitate a proactive approach in diversifying our revenue streams and ensuring financial stability. To address these industry-wide challenges, we are diversifying our revenue streams by expanding our product offerings and focusing on increasing subscriptions. This strategy is designed to reduce our dependence on ad revenues and enhance financial stability.
3. Market Uncertainty Impacting Traffic: The unpredictability in global markets and exchange pricing directly impacts our website traffic and user engagement. During times of economic uncertainty and a steady downward trend, users may reduce their online activity or shift their preferences, affecting our platform's performance. Developing resilience and adaptability strategies is essential to mitigate the adverse effects of market fluctuations on our traffic and user engagement. To counteract these effects, we are continually working on converting new traffic and intensively improving our SEO. These efforts are aimed at maintaining and growing our user base despite market fluctuations.
4. Regulatory Adherence: In today's rapidly evolving regulatory landscape, we understand the increasing complexities that extend beyond GDPR to encompass broader issues such as data privacy, User-Generated Content (UGC) compliance, AI ethics, and online safety. These regulatory frameworks are critical in shaping how we manage data and interact with our user base. To navigate these changes effectively, we are steadfast in our commitment to staying abreast of new regulations and governance practices. Our approach includes the development of robust compliance guidelines and ongoing consultations with legal experts and industry specialists.
Principal risks and uncertainties (continued)
5. Inadequate Disaster Recovery Procedures: Addressing the risks associated with our on-premises data storage, especially in the event of a disaster, is a top priority. Such events pose serious threats to our data integrity and infrastructure. To mitigate these risks, we are transitioning to cloud-based data storage for improved security and redundancy and are updating our infrastructure by replacing old hardware with more robust and reliable systems. This strategy is key to ensuring the protection and stability of our operations under any circumstances.
6. Cybersecurity Risks: As we continue to expand our digital footprint, cybersecurity risks become increasingly significant. Threats such as data breaches, ransomware, and cyber-attacks can disrupt operations and compromise sensitive information. We are committed to maintaining robust cybersecurity measures, including regular security audits, penetration testing, and employee training programs to protect against these threats. Our incident response plan is continually updated to ensure rapid action in the event of a security breach.
Consideration of the principal risks associated with financial instruments is contained in note 23.
People
We would like to thank the whole team at ADVFN who have worked hard during a tumultuous time in the markets.
Directors' statement of responsibilities under section 172 Companies Act 2006
The Directors have considered the requirements of Section 172(1) of the Companies Act 2006 to prepare a statement explaining how the Directors have considered the wider stakeholder needs when performing their duties under Section 172 of the Companies Act 2006.
The Directors consider the stakeholders to be the people who work for us, work with us, invest with us, own us, regulate us and live in the societies we serve. The Directors recognise that building strong relationships with our stakeholders will help deliver the Group's strategy in line with the long-term values. The Directors are committed to effective engagement with all of our stakeholders and seek to understand the interests and views of the Group's stakeholders by engaging with them directly as appropriate.
Depending on the nature of the issue in question, the relevance of each stakeholder group may differ and, as such, as part of the Group's engagement with stakeholders, the Directors seek to understand the relative interests and priorities of each group and to have regard to these, as appropriate, in their decision making. The Directors acknowledge, however, that not every decision the Board makes will necessarily result in a positive outcome for all stakeholders. However, the Directors do challenge management to ensure all stakeholder interests are considered in the day-to-day management and operations of the Group.
As part of their deliberations and decision-making process, the Directors take into account the following:
• the likely consequences of any decisions in the long term;
• interests of the Group's employees;
• need to foster the Group's business relationships with suppliers, customers and others;
• impact of the Group's operations on the community and environment;
• desirability of the Group maintaining a reputation for high standards of business conduct; and
• the need to act fairly as between members of the Group.
As a result of these activities, the Directors believe that they have demonstrated compliance with their obligations under s.172 of the Companies Act 2006.
Environmental Matters
The Directors' aim for the Group is to be and remain a contributing and good "Corporate Citizen".
As a small AIM-listed company, we recognise the importance of understanding and managing the risks and opportunities associated with climate change and other environmental matters. Our business does not have a high carbon footprint and we consider it to be a sustainable business. We try to ensure that our planet's precious resources are used appropriately for the benefit of current and future generations.
Although we are not required to report under the Task Force on Climate-related Financial Disclosures (TCFD) framework, we are committed to monitoring our exposure to climate related risks and identifying opportunities to contribute to a low carbon economy. The Board considers that the business and strategic decisions which it takes now, in furtherance of the Group's business objectives, do not damage the global environment.
Employees
The Group has a small number of employees but those it has are situated and are deployed on the Group's business around the World. We ensure that we comply with all local labour laws and apply what the Directors believe are appropriate standards and systems to monitor and ensure the welfare of those employees.
Stakeholder engagement
The Group is entirely owned by the shareholders of ADVFN Plc and the shares of the Group are traded on AIM. The stakeholders of the Group consist predominantly of the shareholders, employees, advisers and suppliers. The Directors recognise the importance of these relationships and take active steps to develop and strengthen them through dialogue and engagement. These relationships are regularly monitored at Board level.
Governance
Each Board meeting addresses compliance by the Group with its corporate governance codes and reinforces the Board's requirement that its business be conducted with integrity and with due regard for ethical standards.
ON BEHALF OF THE BOARD
Amit Tauman
CEO
20 November 2024
| Consolidated income statement |
| | |
|
|
| 30 June | 30 June |
| | | 2024 | 2023 |
| | Notes | £'000 | £'000 |
| | |
|
|
| | |
| |
| Revenue | 3 | 4,441 | 5,445 |
| Cost of sales | | (218) | (316) |
| | | | |
| Gross profit | | 4,223 | 5,129 |
| | | | |
| Share based payment | 21 | (26) | 319 |
| Amortisation of intangible assets | 12 | (156) | (191) |
| Administrative expenses | | (5,153) | (6,026) |
| Administrative expenses - non-recurring items | 6 | - | (1,178) |
| | | | |
| Total administrative expenses | | (5,335) | (7,076) |
| | | | |
| Operating loss | 4 | (1,112) | (1,947) |
| | | | |
| Finance income | 7 | 198 | 24 |
| Finance expense | 7 | (1) | (11) |
| Other income | | 2 | 20 |
| | | | |
| Loss before tax | | (913) | (1,914) |
| Taxation | 8 | 63 | 58 |
| | | | |
| Loss from continuing operations |
| (850) | (1,856) |
| Loss from discontinued operations | 3 | (68) | (313) |
| | | | |
| Total loss for the period attributable to shareholders of the parent | | (918) | (2,169) |
| | | | |
| Loss per share from continuing operations | | | |
| Basic and diluted | 9 | (1.85p) | (5.16p) |
| | | | |
| Loss per share from total operations | | |
|
| Basic and diluted | | (1.99p) | (6.03p) |
| |
|
| |
| Consolidated statement of comprehensive income |
| | |
|
|
| 30 June | 30 June |
| | | 2024 | 2023 |
| | | £'000 | £'000 |
| | |
|
|
| | |
| |
| Loss for the year |
| (918) | (2,169) |
| |
| | |
| Other comprehensive income: |
| | |
| Items that will be reclassified subsequently to profit or loss: |
| | |
| |
| | |
| Exchange differences on translation of foreign operations |
| 48 | 33 |
| |
| | |
| Total other comprehensive income |
| 48 | 33 |
| |
| | |
| Total comprehensive loss for the year attributable to shareholders of the parent |
|
(870) |
(2,136) |
| |
| | |
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
| Consolidated balance sheet |
| | | |
|
|
| 30 June | 30 June | 1 July |
|
|
| 2024 | 2023 | 2023 |
|
| Notes | £'000 | £'000 | £'000 |
|
| |
| (Restated) | (Restated) |
|
| |
| | |
| Assets |
|
|
|
|
| Non-current assets |
|
| | |
| Property, plant and equipment | 10 | 115 | 160 | 98 |
| Goodwill | 11 | - | - | 988 |
| Intangible assets | 12 | 311 | 218 | 339 |
| Trade and other receivables | 15 | 22 | 25 | 26 |
|
| | | | |
|
| | 448 | 403 | 1,451 |
|
| | | | |
| Current assets | | | | |
| Trade and other receivables | 15 | 561 | 466 | 460 |
| Cash and cash equivalents | | 4,091 | 5,557 | 915 |
|
| | | | |
|
| | 4,652 | 6,023 | 1,375 |
|
| | | | |
| Total assets | | 5,100 | 6,426 | 2,826 |
|
| | | | |
| Equity and liabilities | | | | |
| Equity | | | | |
| Issued capital | 20 | 93 | 92 | 53 |
| Share premium | | 6,705 | 6,676 | 305 |
| Share based payment reserve | | 48 | 22 | 341 |
| Foreign exchange reserve | | 364 | 316 | 283 |
| Retained earnings | | (3,531) | (2,613) | (445) |
|
| | | | |
|
| | 3,679 | 4,493 | 537 |
|
| | | | |
| Non-current liabilities | | | | |
| Borrowing - bank loans | 17 | 9 | 20 | 41 |
| | | | | |
|
| | 9 | 20 | 41 |
|
| | | | |
| Current liabilities | | | | |
| Trade and other payables | 19 | 1,402 | 1,903 | 2,148 |
| Borrowing - bank loans | 17 | 10 | 10 | 13 |
| Borrowing - lease liabilities | | - | - | 87 |
|
| | | | |
|
| | 1,412 | 1,913 | 2,248 |
|
| | | | |
| Total liabilities | | 1,421 | 1,933 | 2,289 |
|
| | | | |
| Total equity and liabilities | | 5,100 | 6,426 | 2,826 |
|
|
| | | |
The comparative information has been restated as a result of an error as discussed in note 2.
The financial statements on pages 21 to 59 were authorised for issue by the Board of Directors on 20 November 2024 and were signed on its behalf by:
Amit Tauman
CEO
Company number: 02374988
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
| Company balance sheet | | At 30 June | At 30 June |
|
| Note | 2024 | 2023 |
| | | £'000 | £'000 |
| | | | |
| Assets | |
| |
| Non-current assets | |
| |
| Property, plant and equipment | 10 | 113 | 154 |
| Intangible assets | 12 | 311 | 218 |
| Trade and other receivables | 15 | 22 | 25 |
| | | | |
| | | 446 | 397 |
|
| | | |
| Current assets | | | |
| Trade and other receivables | 15 | 376 | 313 |
| Cash and cash equivalents | | 4,026 | 5,301 |
| | | | |
| | | 4,402 | 5,614 |
| | | | |
| Total assets | | 4,848 | 6,011 |
| | | | |
| Equity and liabilities | | | |
| Equity | | | |
| Called up share capital | 20 | 93 | 92 |
| Share premium account | | 6,705 | 6,676 |
| Share based payment reserve | | 48 | 22 |
| Retained earnings | | (3,408) | (2,653) |
| | | | |
| | | 3,438 | 4,137 |
| | | | |
| Non-current liabilities | | | |
| Borrowings - bank loans | 17 | 9 | 20 |
| Deferred tax | | 104 | 104 |
| | | | |
| | | 113 | 124 |
| | | | |
| Current liabilities | | | |
| Trade and other payables | 19 | 1,287 | 1,740 |
| Borrowings - bank loans | 17 | 10 | 10 |
| | | | |
| | | 1,297 | 1,750 |
| | | | |
| Total liabilities | | 1,410 | 1,874 |
| | | | |
| Total equity and liabilities | | 4,848 | 6,011 |
| | | | |
| | | | |
Company statement of comprehensive income
As permitted by Section 408 of the Companies Act 2006, the income statement and statement of comprehensive income of the parent company is not presented as part of these financial statements. The parent company's result after taxation for the financial year was a loss of £755,000 (2023: loss of £2,146,000).
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
The financial statements on pages 21 to 59 were authorised for issue by the Board of Directors on 20 November 2024 and were signed on its behalf:
Amit Tauman
CEO
Company number: 02374988
Consolidated statement of changes in equity
|
| Note | Share capital | Share premium | Share based payment reserve | Foreign exchange reserve | Retained earnings
| Total equity
|
|
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
|
| | | | | | | |
| At 1 July 2022 | | 53 | 305 | 341 | 283 | 340 | 1,322 |
| Effect of prior year adjustment | | | | | | (785) | (785) |
|
| | | | | | | |
| Balance at 1 July 2022 - As restated | | 53 | 305 | 341 | 283 | (445) | 537 |
|
| | | | | | | |
| Transactions with equity shareholders: | | | | | | | |
| Share issues | 19 | 39 | 6,448 | - | - | - | 6,487 |
| Cost associated with the issue of shares | | - | (77) | - | - | - | (77) |
| Issue of options | 20 | - | - | 1 | - | - | 1 |
| Lapsed options | 20 | - | - | (320) | - | - | (320) |
|
| | | | | | | |
|
| | 39 | 6,371 | (319) | - | - | 6,091 |
|
| | | | | | | |
|
| | | | | | | |
| Loss for the year after tax | | - | - | - | - | (2,168) | (2,168) |
| | | | | | | | |
| Other comprehensive income | | | | | | | |
| Exchange differences on translation of foreign operations | |
- |
- |
- |
33 |
- |
33 |
|
| | | | | | | |
| Total other comprehensive income | | - | - | - | 33 | - | 33 |
|
| | | | | | | |
| Total comprehensive income | | - | - | - | 33 | (2,168) | (2,135) |
|
| | | | | | | |
| At 30 June 2023 |
| 92 | 6,676 | 22 | 316 | (2,613) | 4,493 |
|
| | | | | | | |
| Transactions with equity shareholders: | | | | | | | |
|
| | | | | | | |
| Issue of shares | 19 | 1 | 29 | - | - | - | 30 |
| Issue of options | 20 | - | - | 26 | - | - | 26 |
| | | | | | | | |
| | | - | 29 | 26 | - | - | 56 |
| | | | | | | | |
| Loss for the year after tax | | - | - | - | - | (918) | (918) |
|
| | | | | | | |
|
| | | | | | | |
| Other comprehensive income | | | | | | | |
| Exchange differences on translation of foreign operations | | - | - | - | 48 | - | 48 |
|
| | | | | 48 | - | 48 |
| Total other comprehensive income | | | | | | | |
|
| | | | | | | |
| Total comprehensive income | | - | - | - | 48 | (918) | (870) |
|
| | | | | | | |
| At 30 June 2024 |
| 93 | 6,705 | 48 | 364 | (3,531) | 3,679 |
|
| | | | | | | |
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
Company statement of changes in equity
|
| Note | Share capital | Share premium | Share based payment reserve | Retained earnings
| Total equity
|
|
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | | |
| At 1 July 2022 | | 53 | 305 | 341 | (507) | 192 |
|
| | | | | | |
| Transactions with equity shareholders: | | | | | | |
| Issue of shares | 19 | 39 | 6,448 | - | - | 6,487 |
| Cost associated with the issue of shares | | - | (77) | - | - | (77) |
| Issue of options | 20 | - | - | 1 | - | 1 |
| Lapsed options | 20 | - | - | (320) | - | (320) |
|
| | | | | | |
|
| | 39 | 6,371 | (319) | - | 6,091 |
|
| | | | | | |
| Loss for the year after tax | | - | - | - | (2,146) | (2,146) |
|
| | | | | | |
| Total comprehensive income for the year | | - | - | - | (2,146) | (2,146) |
|
| | | | | | |
| At 30 June 2023 |
| 92 | 6,676 | 22 | (2,653) | 4,137 |
|
| | | | | | |
|
| | | | | | |
| Transactions with equity shareholders: | | | | | | |
| | | | | | | |
| Issue of shares | 19 | 1 | 29 | - | - | 30 |
| Issue of options | 20 | - | - | 26 | - | 26 |
|
| | | | | | |
|
| | | | | | |
|
| | 1 | 29 | 26 | - | 56 |
|
| | | | | | |
| Loss for the year after tax | | - | - | - | (755) | (755) |
| | | | | | | |
| Total comprehensive income for the year | | - | - | - | (755) | (755) |
|
| | | | | | |
| At 30 June 2024 |
| 93 | 6,705 | 48 | (3,408) | 3,438 |
|
| | | | | | |
|
| | | | | | |
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
| Consolidated cash flow statement |
| | |
|
|
| 12 months to 30 June | 12 months to 30 June |
| | | 2024 | 2023 |
| | Notes | £'000 | £'000 |
|
|
|
| |
| Cash flows from continuing operating activities |
|
| |
| Loss for the year from continuing operations |
| (850) | (1,855) |
| Net finance income received | 7 | (197) | (13) |
| Depreciation of property, plant & equipment | 10 | 49 | 75 |
| Amortisation of intangible assets | 12 | 156 | 191 |
| Disposal of intangible assets | 12 | 30 | - |
| Write off goodwill | 11 | - | 978 |
| Share based payments | 21 | 26 | (319) |
| Issue of shares as directors' compensation | 19 | 30 | - |
| Increase in trade and other receivables | | (91) | (20) |
| Decrease in trade and other payables | | (501) | (226) |
| | | | |
| Net cash generated by continuing operations | | (1,348) | (1,189) |
| | | | |
| Cashflow from discontinued operating activities | | | |
| Loss for the year from discontinued operations | | (68) | (313) |
| Amortisation of intangible assets | 12 | - | 23 |
| Write off intangible assets | 12 | - | 83 |
| Decrease in trade and other receivables | | - | 14 |
| Decrease in trade and other payables | | - | (23) |
| | | | |
| Net cash generated by discontinued operations | | (68) | (216) |
| | | | |
| Income tax receivable | | - | - |
| | | | |
| Net cash generated by operating activities | | (1,416) | (1,405) |
| | | | |
| Cash flows from financing activities | | | |
| Proceeds from issue of share capital | 20 | - | 6,410 |
| Bank interest received | | 198 | 24 |
| Repayment of loans | 17 | (9) | (24) |
| Principal element of lease liability | 17 | - | (91) |
| Lease interest paid | 17 | - | (4) |
| Other interest paid | | (1) | (1) |
| | | | |
| Net cash generated by financing activities | | 188 | 6,314 |
| | | | |
| Cash flows from investing activities | | | |
| Payments for property, plant and equipment | 10 | (6) | (136) |
| Payment of website development costs | 12 | (279) | (175) |
| | | | |
| Net cash used by investing activities | | (285) | (311) |
| | | | |
| Net increase in cash and cash equivalents | | (1,513) | 4,598 |
| Exchange differences | | 47 | 44 |
| | |
| |
| Net increase in cash and cash equivalents | | (1,466) | 4,642 |
| Cash and cash equivalents at the start of the period | | 5,557 | 915 |
| | | | |
| Cash and cash equivalents at the end of the period | | 4,091 | 5,557 |
All financing and investing activities were continuing.
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
| Company cash flow statement |
| | |
|
|
| 12 months to 30 June | 12 months to 30 June |
| | | 2024 | 2023 |
| | Notes | £'000 | £'000 |
|
|
|
| |
| Cash flows from operating activities |
|
| |
| Loss for the period |
| (755) | (2,146) |
| |
| | |
| Net finance income (received)/paid | | (197) | 1 |
| Depreciation of property, plant & equipment | 10 | 49 | 3 |
| Amortisation of intangibles | 12 | 156 | 191 |
| Disposal of intangible assets | 12 | 30 | - |
| Impairment of investments | | - | 1,001 |
| Share based payments - options/warrants | 21 | 26 | (319) |
| Issue of shares as directors' compensation | 19 | 30 | |
| (Increase)/decrease in trade and other receivables | | (58) | 473 |
| Decrease in trade and other payables | | (459) | (509) |
| | | | |
| Net cash generated by operating activities | | (1,178) | (1,305) |
| | | | |
| | | | |
| Cash flows from financing activities | | | |
| Issue of share capital | 20 | - | 6,410 |
| Repayment of loans | 17 | (9) | (24) |
| Bank interest received | | 198 | - |
| Interest paid | | (1) | (1) |
| | | | |
| Net cash generated by financing activities | | 188 | 6,385 |
| | | | |
| Cash flows from investing activities | | | |
| Payments for property, plant and equipment | 10 | (6) | (133) |
| Payment of website development costs | 12 | (279) | (175) |
| | | | |
| Net cash used by investing activities | | (285) | (308) |
| | | | |
| Net increase/(decrease) in cash and cash equivalents | | (1,275) | 4,772 |
| Cash and cash equivalents at the start of the period | | 5,301 | 529 |
| | | | |
| Cash and cash equivalents at the end of the period | | 4,026 | 5,301 |
The accompanying accounting policies and notes on pages 28 to 59 form an integral part of these financial statements.
Notes to the financial statements
1. General information
The principal activity of ADVFN PLC ("the Company") and its subsidiaries (together "the Group") is the development and provision of financial information, primarily via the internet, research services and the development and exploitation of ancillary internet sites.
The principal trading subsidiaries are InvestorsHub.com Inc and N A Data Inc,.
The Company is a public limited company which is quoted on the AIM of the London Stock Exchange and is incorporated and domiciled in the UK. The address of the registered office is Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA.
The registered number of the company is 02374988.
2. Summary of significant accounting policies
Basis of preparation
The consolidated and company financial statements are for the year ended 30 June 2024. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards as at 30 June 2024. The consolidated and company financial statements have been prepared under the historical cost convention and are presented in Sterling rounded to the nearest thousand (£'000) except where indicated otherwise.
The subsidiary companies Cupid Bay Limited, All IPO Plc and MJAC InvestorsHub International Conferences Ltd were dissolved during the year (Cupid Bay Limited and MJAC InvestorsHub International Conferences Ltd 21 November 2023, All IPO Plc 2 April 2024).
Prior year adjustment
The financial statements for the year ended June 2023 have been restated to correct for a prior period error. The intangible assets and the retained earnings have both been reduced by £785,000 which represents an intangible asset acquired as part of the historic acquisition of All IPO Plc. This asset had, incorrectly, not been amortised since its acquisition. Note 12 (Group), intangible assets, shows the effect of the restatement on the cost of the website development costs as at 1 July 2022. There is no impact on the basic or diluted earnings per share.
Assets had also been incorrectly allocated between the group companies, and this has been corrected in the Company as shown in note 12 (Company). There was no net impact of this on the Company financial statements.
Going concern
The financial statements have been prepared on the going concern basis which assumes the Group will continue in existence for the foreseeable future. The Directors have prepared a detailed forecast of future trading and cash flows for at least 12 months from when the accounts were approved. The forecasts take into consideration potential future growth of the business both in the UK and USA, the development of products that will enhance the growth of the business and the potential areas for additional cost saving if required. At 30 June 2024 the Group's cash balances amounted to £4,091,000. The Group's forecasts are based on an amalgamation of pessimistic, realistic and optimistic scenarios using a baseline of current year figures and applying known and expected changes for costs as revenues as well as a 3% inflationary increase. The forecasts show that the Group and the company have sufficient funding to enable them to carry on as a going concern for the next twelve months from the date of signing the audit report. The Directors are also planning on developing new products that will enhance the growth of the business and will consider further areas for additional cost saving if required. The directors have given due consideration to the two subsidiaries for whom ADVFN Plc has given guarantees under the audit exemption rules and do not consider this will affect the Group's risk position. Accordingly, the Directors have prepared these financial statements on the going concern basis.
Notes to the financial statements (continued)
Adoption of new and amended standards and interpretations
The following standards and interpretations apply for the first time to financial reporting periods commencing on or after 1 January 2023:
| New standard or amendment
| Effective date (annual periods beginning on or after): |
| IFRS 17 - Insurance Contracts 1 January 2023
Amendments to IFRS 17 - Insurance Contracts; and Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4 Insurance Contracts)
| 1st January 2023
1st January 2023 |
| Disclosure of Accounting Policies - Amendments to IAS 1 IFRS Practice Statement 2
| 1st January 2023 |
| Definition of Accounting Estimates - Amendments to IAS 8
| 1st January 2023 |
| Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12 | 1st January 2023 |
| International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12) | 1st January 2023 |
None of the standards or amendments which became effective in the year had a significant impact on the company.
New standard or amendment - issued but not yet effective in the year
As at 30 June 2024, the following standards and interpretations had been issued but were not mandatory for annual reporting periods ending on 30 June 2024.
| New standard or amendment
| Effective date (annual periods beginning on or after): |
| Classification of Liabilities as Current or Non-current - Amendments to IAS 1, Non-current liabilities with Covenants - Amendments to IAS 1
| 1st January 2024 |
| Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
| 1st January 2024 |
| Supplier finance arrangements - Amendments to IAS 7 and IFRS 7
| 1st January 2024 |
| Amendments to IAS 21 to clarify the accounting when there is a lack of exchangeability
| 1st January 2025 |
| Classification and Measurement of Financial Instruments (Amendments IFRS 7 and IFRS 9) | 1st January 2026 |
| IFRS 18 Presentation and Disclosure in Financial Statements
| 1st January 2027 |
| IFRS 19 Subsidiaries without Public Accountability: Disclosures
| 1st January 2027 |
The following IFRS Sustainability standards had been issued but were not mandatory for annual reporting periods ending on 30 June 2024.
| New standard
| Effective date (annual periods beginning on or after): |
| IFRS S1: General requirements for disclosure of sustainability-related financial information
| 1st January 2024 |
| IFRS S2: Climate-related disclosures
| 1st January 2024 |
The company have not early adopted and standards or amendments which are not yet effective.
The Directors continue to monitor developments in the relevant accounting standards but do not believe that these changes will significantly impact the Group.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Basis of Consolidation
The Group's financial statements consolidate those of the parent company and all of its subsidiaries drawn up to 30 June 2024. The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated on the date control ceases.
Inter-company transactions, balances and unrealised gains and losses (where they do not provide evidence of impairment of the asset transferred) on transactions between Group companies are eliminated.
Foreign currency translation
a) Functional and presentational currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The Company's functional currency and the Group's and Company's presentational currency is Sterling.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the reporting period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
c) Group companies
The results and financial position of all Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
· Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet.
· Income and expenses for each income statement are translated at the rate of exchange at the transaction date. Where this is not possible, the average rate for the period is used but only if there is no significant fluctuation in the rate and;
· On consolidation, exchange differences arising from the translation of the net investment in foreign entities are recognised in other comprehensive income and accumulated in a separate component of equity. Post transition exchange differences are recycled to profit or loss as a reclassification adjustment upon disposal of the foreign operation.
Income and expense recognition
Revenue is the fair value of the total amount receivable by the Group for supplies of services. VAT or similar local taxes and trade discounts are excluded.
The revenues of the Group are accounted for under IFRS 15 'Revenue from contracts with customers' and reported as follows:
· Subscriptions - both monthly and annual subscriptions are offered and the price for the subscription is quoted on the website. Contract liability for annual subscriptions is recognised on a time basis with equal monthly transfers to the income statement to allocate the recognition across the period of service provision. Payment is received in advance of subscription fulfilment.
· Advertising - fees for advertising are recognised when the service obligations are fulfilled and are subject to agreement by a written contract which includes pricing. Where there are multiple obligations amounts specific to that obligation are transferred to the income statement. Payment terms are 30 days following invoicing.
Interest income and expenditure are reported on an accruals basis. Operating expenses are recognised in the income statement upon utilisation of the service or at the date of their origin.
Employee benefits
The cost of pensions in respect of the Group's defined contribution scheme is charged to profit or loss in the period in which the related employee services were provided.
Non-recurring items
In the prior year certain administrative costs have been shown separately under the heading of "Administrative expenses - non-recurring items". The Directors consider these items to be unusual, one-off costs that are unlikely to reoccur in subsequent financial years. A breakdown of these costs is shown in note 6.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Intangible assets
- Licences
Licences are recognised at cost less any subsequent impairment and amortisation charges, they are amortised over a five-year period on a straight-line basis.
- Internally generated intangible assets
An internally generated intangible asset (website and mobile application) arising from development (or the development phase) of an internal project is recognised if, and only if, all of the following have been demonstrated:
· the technical feasibility of completing the intangible asset so that it will be available for use or sale
· the intention to complete the intangible asset and use or sell it
· the ability to use or sell the intangible asset
· how the intangible asset will generate probable future economic benefits
· the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset
· the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognised, development expenditure is charged to profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses. Internally generated intangibles not yet in use are subject to annual impairment testing.
Internally generated intangible assets are amortised over three to five years. Amortisation commences when the asset is made available for use.
Research expenditure is recognised as an expense in the period in which it is incurred.
- Intangible assets purchased
Intangible assets are purchased when the opportunity arises and capitalised at cost (fair value). Purchased intangible assets are amortised over their useful lives estimated at between 5 and 10 years. Subsequent to initial recognition, purchased intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses.
Property, plant and equipment
Property, plant and equipment are recorded at cost net of accumulated depreciation and any provision for impairment. Depreciation is provided using the straight-line method to write off the cost of the asset less any residual value over its useful economic life. The residual values of assets are reviewed annually and revised where necessary. Assets' useful economic lives are as follows:
Leasehold improvements The shorter of the useful life of the asset or the term of the lease (1 to 3 years)
Computer equipment 33% per annum over 3 years
Office equipment 20% per annum over 5 years
Right of use lease assets The earlier of the end of the useful life of the asset or the end of the lease term
Impairment
For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows. As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level.
Goodwill, other individual assets or cash-generating units that include goodwill and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the carrying amount exceeds the recoverable amount of the asset or cash-generating unit. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. The cashflow evaluations are a result of the Director's estimation of future sales and expenses based on their past experience and the current market activity within the business. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Financial assets
On initial recognition, the financial assets of the Group were all classified as financial assets at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired. At the reporting year-end the financial assets of the Group were all classified as financial assets at fair value through profit or loss.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Trade receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services to customers but also incorporate other types of contractual monetary assets.
They are initially recognised at fair value and measured subsequent to initial recognition at amortised cost using the effective interest method, less any impairment loss.
The Group's financial assets comprise trade receivables, other receivables (excluding prepayments) and cash and cash equivalents.
Trade and other receivables - impairment
The Group applies an expected credit loss model to calculate the impairment losses on its trade receivables. The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. Trade receivables at the balance sheet date have been put into groups based on days past the due date for payment and an expected loss percentage has been applied to each group to generate the expected credit loss provision for each group and a total expected credit loss provision has thus been calculated.
Other receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the deposits given for short term rental of properties. They are initially recognised at fair value and measured subsequent to initial recognition at the value expected to be received back when the properties are vacated.
Financial liabilities
The Group's financial liabilities include trade and other payables and borrowings which include lease liabilities.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest related charges are recognised as an expense in the income statement.
Trade payables are recognised initially at their fair value, net of transaction costs and subsequently measured at amortised costs less settlement payments.
Other liabilities are recognised initially at their fair value, net of transaction costs and subsequently measured at amortised costs less settlement payments
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Income taxes
Current income tax assets and liabilities comprise those obligations to fiscal authorities in the countries in which the Group carries out its operations. They are calculated according to the tax rates and tax laws applicable to the fiscal period and the country to which they relate. All changes to current tax liabilities are recognised as a component of tax expense in the income statement unless the tax relates to an item taken directly to equity in which case the tax is also taken directly to equity. Tax relating to items recognised in other comprehensive income is recognised in other comprehensive income.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are always provided for in full. Deferred tax assets such as those resulting from assessing deferred tax on the expense of share-based payments, are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.
Provisions, contingent liabilities and contingent assets
Provisions are recognised when the present obligations arising from legal or constructive commitment resulting from past events, will probably lead to an outflow of economic resources from the Group which can be estimated reliably.
Provisions are measured at the present value of the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the balance sheet date.
All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Share based employee compensation
The Group operates equity settled share-based compensation plans for remuneration of its employees.
All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. These are indirectly determined by reference to the share options awarded. Their value is appraised at the grant date and excludes the impact of any non-market vesting conditions (e.g. profitability or sales growth targets).
All share-based compensation is ultimately recognised as an expense in the income statement with a corresponding credit to the share-based payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. No adjustment to expense recognised in prior periods is made if fewer share options ultimately are exercised than originally estimated.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value of the shares issued are reallocated to share capital with any excess being recorded as additional share premium.
Where modifications are made to the vesting or lapse dates of options the excess of the fair value of the revised options over the fair value of the original options at the modification date is expensed over the remaining vesting period.
Dividends
During the year, no dividends (2023: £Nil) were paid. The board is not recommending the payment of any further dividends in the current financial year.
Final equity dividends to the shareholders of ADVFN plc are recognised in the period that they are approved by shareholders. Interim equity dividends are recognised in the period that they are paid.
Dividends receivable are recognised when the Company's right to receive payment is established.
Notes to the financial statements (continued)
Summary of significant accounting policies (continued)
Equity
Issued capital
Ordinary shares are classified as equity. The nominal value of shares is included in issued capital.
Share premium
The share premium account represents the excess over nominal value of the fair value of consideration received for equity shares, net of the expenses of the share issue.
Share based payment reserve
The share-based payment reserve represents equity settled share-based employee remuneration until such share options are exercised.
Foreign exchange reserve
The foreign exchange reserve represents foreign exchange gains and losses arising on translation of investments in overseas subsidiaries into the consolidated financial statements.
Retained earnings
The retained earnings include all current and prior period results for the Group and the post-acquisition results of the Group's subsidiaries as determined by the income statement.
Use of key accounting estimates and judgements
Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimates is contained in the accounting policies and/or the notes to the financial statements and the key areas are summarised below:
Judgements in applying accounting policies
a) Capitalisation of development costs in accordance with IAS 38 requires analysis of the technical feasibility and commercial viability of the project in the future. This in turn requires a long-term judgement to be made about the development of the industry in which the development will be marketed. Where the directors consider that sufficient evidence exists surrounding the technical feasibility and commercial viability of the project, which indicate that the costs incurred will be recovered they are capitalised within intangible fixed assets. The amount of the capitalisation is based on estimates to judge the percentage of the time relevant staff spend on projects as specific timesheets are not maintained. Where insufficient evidence exists, the costs are expensed to the income statement.
b) The directors have used their judgement to decide whether the Group should be treated as a going concern and continue in existence for the foreseeable future. Having considered the latest Group forecasts, which cover a period of eighteen months from the balance sheet date, together with the cash resources available to them, the directors have judged that it is appropriate for the financial statements to be prepared on the going concern basis.
c) The application of IFRS 15 - Revenue from contracts with customers requires an assessment of the elements of the contract to separate potentially bundled services requiring different treatment, the recognition of revenue at the point of performance obligations and the assessment of the correct amount of revenue for each of those obligations.
d) The directors have used their judgement to assess the valuation of the call option agreed on 3 May 2023 to purchase 50% of ADVFN Brasil Ltda within the next 3 years. Management have considered the future performance of the business and have judged that this will remain out of the money for the remainder of its existence and therefore continues to have no intrinsic value.
Sources of estimation uncertainty
Determining whether intangible assets are impaired requires an estimation of the value in use of the cash generating unit to which the intangibles have been allocated. The carrying value of the investments are also assessed annually, to consider whether a reversal of the full impairment done in the year ended 30 June 2024 would be appropriate. The value in use calculations require an estimation of the future cash flows expected to arise from the cash generating units and a suitable discount rate in order to calculate a suitable present value.
Notes to the financial statements (continued)
3. Segmental analysis
The directors identify operating segments based upon the information which is regularly reviewed by the chief operating decision maker. The Group considers that the chief operating decision makers are the executive members of the Board of Directors. The Group has identified two reportable operating segments, being that of the provision of financial information and that of other services. The provision of financial information is made via the Group's various website platforms.
The parent entity's operations are entirely of the provision of financial information.
Three minor operating segments, for which IFRS 8's quantitative thresholds have not been met, are currently combined below under 'other'. The main sources of revenue for these operating segments are the provision of financial broking services, financial conference events and other internet services not related to financial information. Segment information can be analysed as follows for the reporting period under review.
| 2024 | Continuing operations | Discontinued | | ||
|
| Provision of financial information | Other | Total | | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | |
| Revenue from external customers | 4,441 | - | 4,441 | - | 4,441 |
| Depreciation and amortisation | (205) | - | (205) | - | (205) |
| Other operating expenses | (4,989) | (359) | (5,348) | (68) | (5,416) |
| | | | | | |
| Segment operating loss | (753) | (359) | (1,112) | (68) | (1,180) |
| | | | | | |
| Other income | 2 | - | 2 | - | 2 |
| Interest income | 198 | - | 198 | - | 198 |
| Interest expense | (1) | - | (1) | - | (1) |
| | | | | | |
| Segment assets | 5,074 | 26 | 5,100 | - | 5,100 |
| Segment liabilities | (1,420) | (1) | (1,421) | - | (1,421) |
| Purchases of non-current assets | (285) | - | (285) | - | (285) |
| | | | | | |
| 2023 | Continuing operations | Discontinued | | ||
|
| Provision of financial information | Other | Total | | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| | | | | | |
| Revenue from external customers | 5,445 | - | 5,445 | 16 | 5,461 |
| Depreciation and amortisation | (266) | - | (266) | (23) | (289) |
| Other operating expenses | (5,666) | (282) | (5,948) | (306) | (6,254) |
| Non-recurring iterms | (1,178) | - | (1,178) | - | (1,178) |
| | | | | | |
| Segment operating loss | (1,665) | (282) | (1,947) | (313) | (2,260) |
| | | | | | |
| Other income | 20 | - | 20 | - | 20 |
| Interest income | 24 | - | 24 | - | 24 |
| Interest expense | (11) | - | (11) | - | (11) |
| | | | | | |
| Segment assets | 6,135 | 981 | 7,116 | 95 | 7,211 |
| Segment liabilities | (1,784) | (22) | (1,806) | (27) | (1,833) |
| Purchases of non-current assets | (311) | - | (311) | - | (311) |
Notes to the financial statements (continued)
Segmental analysis (continued)
The Group's revenues from all operations, which wholly relate to the sale of services, from external customers and its non-current assets, are divided into the following geographical areas:
|
| Revenue | Non-current assets | Revenue | Non-current assets |
| | 2024 | 2024 | 2023 | 2023 |
| | £'000 | £'000 | £'000 | £'000 |
| |
|
| | |
| UK (domicile) | 2,370 | 497 | 2,651 | 1,184 |
| USA | 1,849 | - | 2,659 | 983 |
| Other | 222 | - | 151 | - |
| | | | | |
| | 4,441 | 497 | 5,461 | 2,167 |
| | | | | |
Revenues are allocated to the country in which the customer resides. During both 2024 and 2023 no single customer accounted for more than 10% of the Group's total revenues.
4. Operating loss
|
| 2024 | 2023 |
| Operating loss has been arrived at after charging: | £'000 | £'000 |
| |
| |
| Foreign exchange loss | 8 | 7 |
| Depreciation and amortisation: | | |
| Depreciation of property, plant and equipment: | 49 | 75 |
| Amortisation of intangible assets from continuing and discontinued operations | 156 | 214 |
| |
| |
| Employee costs (Note 5) | 2,228 | 2,837 |
| | | |
| Lease payments on land and buildings (Note 22) | - | 91 |
| Audit and non-audit services: | | |
| Fees payable to the company's auditor for the audit of the Group's annual accounts | 89 | 87 |
Remuneration of key senior management for Group and Company
| | 2024 | 2023 |
| | £'000 | £'000 |
| Key senior management comprises only directors |
| |
| Salary and fees | 494 | 697 |
| Share based payments | 17 | 1 |
| Post-employment benefits - defined contribution pension plans | - | 6 |
| | | |
| | 511 | 704 |
| Highest paid director | | |
| Salary and fees | 200 | 200 |
| Share based payments | 15 | 1 |
| | | |
| | 215 | 201 |
Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report
on page 15.
Notes to the financial statements (continued)
5. Employees
GROUP
|
| 2024 | 2023 |
| | £'000 | £'000 |
| Employee costs (including directors): |
| |
| Wages and salaries | 1,991 | 2,581 |
| Social security costs | 160 | 224 |
| Pension costs | 21 | 31 |
| Share based payments | 26 | 1 |
| Payments made in shares | 30 | - |
| | | |
| | 2,228 | 2,837 |
| | |
|
| The average number of employees during the year was made up as follows: | No. | No. |
| | |
|
| Development | 6 | 4 |
| Sales and Administration | 17 | 27 |
| | | |
| | 23 | 31 |
COMPANY
| | | 2024 | 2023 |
| | | £'000 | £'000 |
| Employee costs (including directors): | |
| |
| Wages and salaries | | 1,337 | 1,359 |
| Social security costs | | 108 | 135 |
| Pension | | 20 | 28 |
| Share based payments | | 56 | 1 |
| | | | |
| | | 1,521 | 1,523 |
| | | | |
| The average monthly number of employees during the year was as follows: | | No. | No. |
| | | | |
| Development | | 3 | 3 |
| Sales and Administration | | 13 | 13 |
| | | | |
| | | 16 | 16 |
| | | | |
Details of the directors' emoluments, together with other related information, are set out in the Remuneration Report
on page 15.
6. Non-recurring items
GROUP AND COMPANY
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Write off goodwill related to IHUB | - | 978 |
| Costs relating to the exit of directors | - | 200 |
| | - | 1,178 |
In the prior year the goodwill on the investment in IHUB was impaired during the review of the valuation of the investments. There were further legal fees incurred relating to the exit of the previous directors.
Notes to the financial statements (continued)
7. Finance income and expense
GROUP
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Finance income: |
| |
| Bank interest | 198 | 24 |
| Finance expense: |
| |
| Lease interest | - | (4) |
| Bank interest | (1) | (7) |
8. Income tax expense
GROUP
|
| 2024 | 2023 |
| | £'000 | £'000 |
|
|
| |
| Current Tax: |
| |
| UK corporation tax on losses for the year | (38) | (58) |
| Adjustments in respect of prior periods | (25) | - |
| | | |
| Total current taxation | (63) | (58) |
| | | |
| Deferred tax | | |
| Origination and reversal of timing differences | 106 | 88 |
| Carried forward losses (DTA) | (106) | (88) |
| Taxation | (63) | (58) |
The tax assessed for the year is different from the standard rate of corporation tax as applied in the respective trading domains where the Group operates. The differences are explained below:
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Loss before tax from total operations | (981) | (2,227) |
| Loss before tax multiplied by the respective standard rate of corporation tax applicable in the UK (25.00%) (2023: 19.00%) |
(245) |
(423) |
| | | |
| Effects of: | | |
| Non-deductible expenses | 3 | 178 |
| Capital allowances | 7 | (25) |
| Enhanced Research & Development expenditure | (44) | (43) |
| Surrender of tax losses for R & D tax credit | 96 | 77 |
| Current year R&D tax credit | (38) | (58) |
| Effect of discontinued operations | - | 60 |
| Effect of difference in tax rates | 30 | (21) |
| Effect of losses utilised against other income | 49 | - |
| Consolidation adjustments - no tax effect | 104 | 197 |
| | | |
| Tax credit for the year | (38) | (58) |
The Group has not applied the new Pillar 2 Model rules, as these apply only to multinational entities with revenue in excess of €750 million.
Notes to the financial statements (continued)
9. Loss per share
| | 12 months to 30 June | 12 months to 30 June |
| | 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Loss for the year attributable to equity shareholders from continuing operations | (850) | (1,856) |
| | | |
| Loss for the year attributable to equity shareholders from total operations | (918) | (2,169) |
| | | |
| Weighted average number of shares | | |
| Prior year: number of shares in issue prior to rights issue | - | 26,315,318 |
| Prior year correction for deemed rights issue | - | 169,179 |
| | | |
| Deemed number of shares before rights issue | - | 26,484,497 |
| | | |
| Weighted average shares | | |
| 26,484,497 x 188/365 (prior to rights issue) | - | 13,641,330 |
| 46,004,758 x 177/365 (post rights issue) | - | 22,309,157 |
| | | |
| | | |
| Weighted average number of shares used as the denominator for calculating basic and diluted loss per share. | 46,039,279 | 35,950,487 |
| | | |
| Loss per share for the year attributable to equity shareholders from continuing operations: | | |
| Basic and diluted | (1.85p) | (5.16p) |
| | | |
| Loss per share for the year attributable to equity shareholders from discontinued operations: | | |
| Basic and diluted | (0.14p) | (0.87p) |
| | | |
| Total loss per share for the year attributable to equity shareholders: | | |
| Basic and diluted | (1.99p) | (6.03p) |
| | | |
Where a loss has been recorded for the year the diluted loss per share does not differ from the basic loss per share.
Where a profit has been recorded but the average share price for the year remains under the exercise price the existence of options is not normally dilutive. However, whilst the average exercise price of all outstanding options is above the average share price there are a number of options which are not. Under these circumstances those options where the exercise price is below the average share price are treated as dilutive.
During the prior year, the company made a rights issue (Note 20). On 16 May 2024, 280,000 shares were issued.
Notes to the financial statements (continued)
10. Property, plant and equipment
GROUP
|
| Leasehold property improvements | Computer equipment | Office equipment | Right of use lease assets | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | | |
| At 1 July 2022 | 48 | 435 | 308 | 349 | 1,140 |
| Additions | - | 132 | 4 | - | 136 |
| Disposal | - | - | - | (349) | (349) |
| FX difference | - | - | (11) | - | (11) |
| | | | | | |
| At 30 June 2023 | 48 | 567 | 301 | - | 916 |
| | | | | | |
| Additions | - | 6 | - | - | 6 |
| Disposal | - | (4) | (6) | - | (10) |
| FX difference | - | - | - | - | - |
| | | | | | |
| At 30 June 2024 | 48 | 569 | 295 | - | 912 |
| | | | | | |
| Depreciation | | | | | |
| At 1 July 2022 | 48 | 411 | 307 | 276 | 1,042 |
| Charge for the year | - | 2 | - | 73 | 75 |
| Disposal | - | - | - | (349) | (349) |
| FX difference | - | - | (12) | - | (12) |
| | | | | | |
| At 30 June 2023 | 48 | 413 | 295 | - | 756 |
| | | | | | |
| Charge for the year | - | 47 | 2 | - | 49 |
| Disposal | - | (4) | (1) | - | (5) |
| FX difference | - | - | (3) | - | (3) |
| | | | | | |
| At 30 June 2024 | 48 | 456 | 293 | - | 797 |
| | | | | | |
| Net book value | | | | | |
| At 30 June 2024 | - | 113 | 2 | - | 115 |
| At 30 June 2023 | - | 154 | 6 | - | 160 |
| | | | | | |
Charge over assets
A fixed and floating charge is held by Barclays Bank which covers all the property and undertakings of the company against the provision of any loan, debenture or other bank liability.
Notes to the financial statements (continued)
Property, plant and equipment (continued)
COMPANY
|
| Leasehold property improvements | Computer equipment | Office equipment | Total |
| | £'000 | £'000 | £'000 | £'000 |
| Cost | | | | |
| At 1 July 2022 | 48 | 430 | 106 | 584 |
| Additions | - | 133 | - | 133 |
| Disposals | - | - | - | - |
| | | | | |
| At 30 June 2023 | 48 | 563 | 106 | 717 |
| | | | | |
| Additions | - | 6 | - | 6 |
| | | | | |
| At 30 June 2024 | 48 | 569 | 106 | 723 |
| | | | | |
| Depreciation | | | | |
| At 1 July 2022 | 48 | 406 | 106 | 560 |
| Charge for the year | - | 3 | - | 3 |
| | | | | |
| At 30 June 2023 | 48 | 409 | 106 | 563 |
| | | | | |
| Charge for the year | - | 47 | - | 47 |
| | | | | |
| At 30 June 2024 | 48 | 456 | 106 | 610 |
| | | | | |
| Net book value | | | | |
| At 30 June 2024 | - | 113 | - | 113 |
| At 30 June 2023 | - | 154 | - | 154 |
| | | | | |
11. Goodwill
GROUP
| | | | £'000 |
| | | | |
| At 1 July 2022 | | | 988 |
| Exchange differences | | | (10) |
| Impairment | | | (978) |
| | | | |
| At 30 June 2023 | | | - |
| | | | |
| Exchange differences | | | - |
| Impairment | | | - |
| | | | |
| At 30 June 2024 | | | - |
| | | | |
The goodwill carried in the balance sheet was attributable to InvestorsHub.com Inc.
During the year ended 30 June 2023, the goodwill was fully impaired.
Notes to the financial statements (continued)
12. Other intangible assets
GROUP
| | Licences | Brands & subscriber lists | Website development costs | Mobile application | Software | Crypto-currencies | Total |
| | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| As restated |
|
|
|
|
|
|
|
| Cost or valuation | | | | | |
|
|
| | | | | | |
|
|
| At 1 July 2022 (restated) | 162 | 2,129 | 1,764 | 10 | 220 | 1 | 4,286 |
| Additions | - | - | 175 | - | - | - | 175 |
| Disposals | - | - | - | - | (220) | - | (220) |
| | | | | | | | |
| At 30 June 2023 | 162 | 2,129 | 1,939 | 10 | - | 1 | 4,241 |
| Additions | - | - | 278 | - | - | - | 278 |
| Disposals | (62) | (607) | (182) | - | - | - | (851) |
| | | | | | | | |
| At 30 June 2024 | 100 | 1,522 | 2,035 | 10 | - | 1 | 3,668 |
| | | | | | | | |
| Amortisation | | | | | | | |
| | | | | | | | |
| At 1 July 2022 (restated) | 162 | 2,129 | 1,531 | 10 | 115 | - | 3,947 |
| Charge for the year | - | - | 191 | - | 23 | - | 214 |
| Disposals | - | - | - | - | (138) | | (138) |
| | | | | | | | |
| At 30 June 2023 | 162 | 2,129 | 1,722 | 10 | - | - | 4,023 |
| Charge for the year | - | - | 156 | - | - | - | 156 |
| Disposals | (62) | (607) | (153) | - | - | - | (822) |
| | | | | | | | |
| At 30 June 2024 | 100 | 1,522 | 1,725 | 10 | - | - | 3,357 |
| | | | | | | | |
| Net book value | | | | | | | |
| At 30 June 2024 | - | - | 310 | - | - | 1 | 311 |
| At 30 June 2023 | - | - | 217 | - | - | 1 | 218 |
| | | | | | | | |
Website development costs, mobile applications and software are internally generated assets. £148,000 of the £278,000 additions during the year are still 'under construction' and therefore do not meet the criteria for amortisation yet.
The opening balances as at 1 July 2022 have been restated. Details of the restatement can be found in Note 2.
All additions are internally generated by capitalisation of development work on websites and software projects.
The directors are satisfied that no indication of impairment exists in respect of these assets.
Notes to the financial statements (continued)
Other intangible assets (continued)
COMPANY
|
| | Licenses | Mobile application | Website development | Crypto-currencies | Total |
| | | £'000 | £'000 | £'000 | £'000 | £'000 |
| As restated | |
|
|
|
|
|
| Cost | | | | | | |
| | | | | | | |
| At 1 July 2022 (restated) | | 100 | 10 | 1,764 | 1 | 1,875 |
| Additions | | - | - | 175 | - | 175 |
| Disposals | | - | - | - | - | - |
| | | | | | | |
| At 30 June 2023 | | 100 | 10 | 1,939 | 1 | 2,050 |
| Additions | | - | - | 278 | - | 278 |
| Disposals | | - | - | (182) | - | (182) |
| | | | | | | |
| At 30 June 2024 | | 100 | 10 | 2,035 | 1 | 2,146 |
| | | | | | | |
| Amortisation | | | | | | |
| | | | | | | |
| At 1 July 2022 (restated) | | 100 | 10 | 1,531 | - | 1,641 |
| Charge for the year | | - | - | 191 | - | 191 |
| Disposals | | - | - | - | - | - |
| | | | | | | |
| At 30 June 2023 | | 100 | 10 | 1,722 | - | 1,832 |
| Charge for the year | | - | - | 156 | - | 156 |
| Disposals | | - | - | (153) | | (153) |
| | | | | | | |
| At 30 June 2024 | | 100 | 10 | 1,725 | - | 1,835 |
| | | | | | | |
| Net book value | | | | | | |
| At 30 June 2024 | | - | - | 310 | 1 | 311 |
| At 30 June 2023 | | - | - | 217 | 1 | 218 |
| | | | | | | |
Website development costs, mobile applications and software are internally generated assets. £148,000 of the £278,000 additions during the year are still 'under construction' and therefore do not meet the criteria for amortisation yet.
The opening balances as at 1 July 2022 have been restated. Details of the restatement can be found in Note 2.
All additions are internally generated by capitalisation of development work on websites and software projects.
The directors are satisfied that no indication of impairment exists in respect of these assets.
Notes to the financial statements (continued)
13. Subsidiary companies consolidated in these accounts
COMPANY
| | | | Subsidiaries |
| | | | £'000 |
|
| |
| |
| At 1 July 2022 | |
| 1,001 |
| Impairment | |
| (1,000) |
| Write offs | |
| (1) |
| | | | |
| 30 June 2023 | | | - |
| | | | |
| | | | |
| 30 June 2024 | | | - |
|
| | | |
In the prior year, the investment in InvestorsHub.com Inc was fully impaired. There have been no indications that any reversal of the impairment should be considered.
|
| Country of incorporation | % interest in ordinary shares | Principal activity | Registered address |
| | | 30 June 2024 | | |
| | |
| | |
| Fotothing Limited | England & Wales | 100.00 | Dormant | Suite 28 Ongar Business Centre, The Gables, Ongar, England, CM5 0GA |
| NA Data Inc. | USA | 100.00 | Office services | P.O. Box 780 Harrisonville Mo. 64701 |
| InvestorsHub.com Inc. | USA | 100.00 | Financial information web site | As NA Data Inc. |
| ADVFN Brazil Limited | England & Wales | 100.00 | Dormant | As Fotothing Limited |
| Advfn IL Limited | Israel | 100.00 | Dormant | Rothschild 45, Tel-Aviv. |
| Cupid Bay Limited (dissolved 21 November 2023) | England & Wales | 100.00 | Dissolved | N/A |
| MJAC InvestorsHub International Conferences Limited (Dissolved 21 November 2023) | England & Wales | 100.00 | Dissolved | N/A |
| All IPO Plc (Dissolved 2 April 2024) | England & Wales | 100.00 | Dissolved | N/A |
Notes to the financial statements (continued)
14. Deferred tax
GROUP
The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon during the current and prior periods:
| | Website development & software costs | UK tax losses | Total |
| | £'000 | £'000 | £'000 |
| | | |
|
| At 30 June 2022 | (387) | 387 | - |
| Credit/(charge) to profit or loss | (88) | 88 | - |
| | | |
|
| At 30 June 2023 | (475) | 475 | - |
| Credit/(charge) to profit or loss | (106) | 106 | - |
| | | |
|
| At 30 June 2024 | (581) | 581 | - |
Deferred tax in ADVFN Plc amounted to £105,900 and nil in subsidiary companies. The deferred tax liability for the temporary difference has been recognised at 25% as per the future tax rate which has increased the deferred tax liability by £105,900. The deferred tax asset for the losses has also been recognised at 25% as per the future tax rate.
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances, after offset, for the purposes of financial reporting:
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Deferred tax liabilities |
| |
| - Website development & software costs | (106) | (88) |
| Deferred tax assets | | |
| - UK tax losses | 106 | 88 |
| | | |
| | - | - |
| | | |
At the balance sheet date the Group had unused tax losses of £3,688,436 (2023: £5,802,000) available for offset against future profits. The Group has surrendered losses of £382,000 for the R&D tax credit for the year. A deferred tax asset has been recognised in respect of £423,000 (2023: £350,000) of such losses, as these losses would offset any taxable profits arising as a result of the unwinding of the deferred tax liability in respect of website development costs. No deferred tax asset has been recognised in respect of the remaining £3,260,000 (2023: £5,452,000) due to the unpredictability of future profit streams. Substantially all of the losses may be carried forward indefinitely.
COMPANY
The Deferred Tax Liability in the ADVFN company is due to the temporary difference between the accounting base and tax base for the Intangible - Website development, temporary difference £340,000 and deferred tax liability £85,000 and for Computer Equipment, temporary difference £84,000 and deferred tax liability £21,000.
Notes to the financial statements (continued)
15. Trade and other receivables
GROUP
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
|
|
| Non-current assets |
| |
| Other receivables | 22 | 25 |
| | | |
| | | |
| Current assets | | |
| Trade receivables - gross | 368 | 257 |
| Less: provision for impairment - expected loss | (38) | (14) |
| Less: provision for impairment - specific | (3) | (9) |
| Trade receivables - net | 327 | 234 |
| Prepayments and accrued income | 87 | 124 |
| Other receivables | 27 | 26 |
| Recoverable corporation tax | 120 | 82 |
| | | |
| Total trade and other receivables | 561 | 466 |
| | | |
The ageing of trade receivables is as follows:
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Not past due and not impaired | 193 | 192 |
| Past due but not impaired | 172 | 56 |
| Past due and fully impaired | 3 | 9 |
| Trade receivables - gross | 368 | 257 |
| | | |
| Not past due and not impaired | 193 | 192 |
| Past due but not impaired: | | |
| Up to 30 days | 4 | 28 |
| 31 to 60 days | 11 | 1 |
| 61 to 90 days | 24 | 15 |
| Over 90 days | 133 | 12 |
| | 172 | 56 |
| Receivables not impaired | 365 | 248 |
| Past due but fully impaired | 3 | 9 |
| Less impairment provision | (41) | (23) |
| Trade receivables - net | 327 | 234 |
| | | |
Provision for impairment:
| | 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Opening | 23 | 20 |
| Additional provision recognised | 18 | 3 |
| Closing | 41 | 23 |
| | | |
The Directors consider that the carrying amount of trade and other receivables in both the Group and Company is approximately equal to their fair value.
Notes to the financial statements (continued)
COMPANY
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
|
|
| Non-current assets |
| |
| Other receivables | 22 | 25 |
| | | |
| | | |
| Current assets | | |
| Trade receivables - gross | 167 | 123 |
| Less: provision for impairment - expected loss | (8) | (7) |
| Less: provision for impairment - specific | (1) | (9) |
| Trade receivables - net | 158 | 107 |
| Prepayments and accrued income | 83 | 102 |
| Other receivables | 15 | 21 |
| Recoverable corporation tax | 120 | 82 |
| Amounts owed by Group undertakings | - | - |
| | | |
| Total trade and other receivables | 376 | 313 |
| | | |
The ageing of trade receivables is as follows:
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Not past due and not impaired | 127 | 84 |
| Past due but not impaired | 39 | 30 |
| Past due and fully impaired | 1 | 9 |
| Trade receivables - gross | 167 | 123 |
| | | |
| Not past due and not impaired | 127 | 84 |
| Past due but not impaired: | | |
| Up to 30 days | 2 | 21 |
| 31 to 60 days | 2 | - |
| 61 to 90 days | 3 | 7 |
| Over 90 days | 32 | 11 |
| | 39 | 39 |
| Receivables not impaired | 166 | 114 |
| Past due and fully impaired | 1 | 9 |
| Less impairment provision | (9) | (16) |
| Trade receivables - net | 158 | 107 |
| | | |
Provision for impairment:
| | 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Opening | 16 | 10 |
| Movement in the year | (7) | 6 |
| Closing | 9 | 16 |
| | | |
The Directors consider that the carrying amount of trade and other receivables in both the Group and Company is approximately equal to their fair value.
Notes to the financial statements (continued)
16. Credit quality of financial assets
An impairment provision has been calculated on the basis of expected credit losses ("ECL") as required under IFRS 9.
GROUP
As of 30 June 2024, trade receivables of £172,000 (2023: £56,000) were past due but not impaired (see note 15). These relate to a number of independent customers for whom there is no recent history of default.
| Expected credit loss provision | 2024 | 2023 | ||
| | £'000 | % | £'000 | £'000 |
| | | |
| |
| Not past due | 192 | 1% | 2 | 192 |
| Not more than 3 months | 40 | 5% | 2 | 28 |
| More than 3 months but not more than 6 months | 39 | 15% | 6 | 1 |
| More than 6 months but not more than 1 year | 75 | 25% | 18 | 15 |
| More than 1 year | 19 | 50% | 10 | 12 |
| | | | | |
| | 365 | | 38 | 248 |
| | | | | |
Impaired receivables allowance account
|
| 2024 | 2023 |
| Specific provision | £'000 | £'000 |
|
|
| |
| At 1 July | 9 | 2 |
| Utilised during the year | (8) | (3) |
| Created during the year | 2 | 10 |
| | | |
| At 30 June | 3 | 9 |
|
| | |
|
| | |
The carrying amount of the Group's trade receivables is denominated in the following currencies:
|
| 2024 | 2023 |
| | £'000 | £'000 |
| |
| |
| Sterling | 84 | 62 |
| Euro | 11 | 3 |
| US dollar | 232 | 169 |
| | | |
| | 327 | 234 |
| | | |
Notes to the financial statements (continued)
Credit quality of financial assets (continued)
COMPANY
As of 30 June 2024, trade receivables of £39,000 (2023: £30,000) were past due but not impaired (see note 15). These relate to a number of independent customers for whom there is no recent history of default.
| Expected credit loss provision | 2024 | 2023 | ||
| | £'000 | % | £'000 | £'000 |
| | | |
| |
| Not past due | 128 | 1% | 1 | 84 |
| Not more than 3 months | 7 | 5% | - | 18 |
| More than 3 months but not more than 6 months | 14 | 15% | 2 | - |
| More than 6 months but not more than 1 year | 15 | 25% | 4 | 3 |
| More than 1 year | 2 | 50% | 1 | 9 |
| | | | | |
| | 166 | | 8 | 114 |
| | | | | |
Impaired receivables allowance account
|
| 2024 | 2023 |
| Specific provision | £'000 | £'000 |
|
|
| |
| At 1 July | 9 | 2 |
| Utilised during the year | (10) | (3) |
| Created during the year | 2 | 10 |
| | | |
| At 30 June | 1 | 9 |
The carrying amount of the Company's trade receivables is denominated in the following currencies:
|
| | 2024 | 2023 |
| | | £'000 | £'000 |
| | |
| |
| Sterling | | 85 | 70 |
| Euro | | 11 | 3 |
| US dollar | | 62 | 34 |
| | | | |
| | | 158 | 107 |
| | | | |
Notes to the financial statements (continued)
17. Interest bearing borrowings
Bank loans
As a result of the COVID-19 pandemic the Directors considered it prudent to take further steps to ensure that short term cashflow did not present a problem for the Group. Short term finance offered under the Business Bounce Back loan scheme provided an additional layer of protection whilst the economy rides out the effects of the pandemic. The UK loan is charged at 2.5% over 6 years with an interest and payment free period for the first 12 months.
Lease liabilities
The carrying value of the lease liabilities is included in the borrowing classification. There are no leases carried in the Company. For further details please see Note 22.
GROUP
| | 2024 | 2023 |
| | £'000 | £'000 |
| Non-current |
| |
| Bank loans | 9 | 20 |
| | | |
| | 9 | 20 |
| | | |
| Brought forward | 20 | 41 |
| Cash flows | (12) | (22) |
| Interest and fees | 1 | 1 |
| | | |
| As at 30 June | 9 | 20 |
| | | |
| Current | | |
| Bank loans | 10 | 10 |
| Lease liability | - | - |
| | | |
|
| 10 | 10 |
|
| | |
| Brought forward | 10 | 100 |
| Cash flows | - | (94) |
| Interest and fees | - | 4 |
| | | |
| As at 30 June | 10 | 10 |
Notes to the financial statements (continued)
Interest bearing borrowings (continued)
COMPANY
| | 2024 | 2023 |
| | £'000 | £'000 |
| Non-current |
| |
| Bank loans | 9 | 20 |
| | | |
| | | |
| | | |
| Brought forward | 20 | 41 |
| Cash flows | (12) | (20) |
| Interest and fees | 1 | 1 |
| | | |
| As at 30 June | 9 | 20 |
| | | |
| Current | | |
| Bank loans | 10 | 10 |
| | | |
|
| | |
|
| | |
| Brought forward | - | 13 |
| Cash flows | - | (4) |
| Interest and fees | - | 1 |
| | | |
| As at 30 June | 10 | 10 |
Changes in liabilities arising from financing activities
GROUP
| | 2023 | Cash movements | Non-cash movements | 2024 |
| | £'000 | £'000 | £'000 | £'000 |
| |
|
|
|
|
| Long term borrowing | 30 | (12) | 1 | 19 |
| | | | | |
COMPANY
| | 2023 | Cash movements | Non-cash movements | 2024 |
| | £'000 | £'000 | £'000 | £'000 |
| |
|
|
|
|
| Long term borrowing | 30 | (12) | 1 | 19 |
| | | | | |
Notes to the financial statements (continued)
18. Financial instruments
GROUP
| Categories of financial instrument | 2024 | 2023 |
| | £'000 | £'000 |
| Non-current |
| |
| Trade and other receivables - at amortised cost | 22 | 25 |
| | | |
| Current | | |
| Trade and other receivables - at amortised cost | 355 | 260 |
| | | |
| Cash and cash equivalents | 4,091 | 5,557 |
| | | |
| Financial assets | 4,468 | 5,842 |
| | | |
| Non-current | | |
| Borrowings | 9 | 20 |
| | | |
| Current | | |
| Borrowings - at amortised cost | 10 | 10 |
| | | |
| Trade and other payables - at amortised cost | 743 | 1,136 |
| |
| |
| Financial liabilities | 753 | 1,146 |
| |
| |
COMPANY
| Categories of financial instrument | 2024 | 2023 |
| | £'000 | £'000 |
| Non-current |
| |
| Trade and other receivables - at amortised cost | 22 | 25 |
| | | |
| Current | | |
| Trade and other receivables - at amortised cost | 172 | 107 |
| | | |
| Cash and cash equivalents | 4,026 | 5,301 |
| | | |
| Financial assets | 4,220 | 5,433 |
| | | |
| Non-current | | |
| Borrowings - at amortised cost | 9 | 20 |
| | | |
| Current | | |
| Borrowings | 10 | 10 |
| | | |
| Trade and other payables - at amortised cost | 708 | 1,073 |
| | | |
| Financial liabilities | 718 | 1,083 |
| | | |
Notes to the financial statements (continued)
19. Trade and other payables
GROUP
|
| 2024 | 2023 |
| | £'000 | £'000 |
|
|
| |
| Trade payables | 447 | 771 |
| Social security and other taxes | 80 | 119 |
| Accrued expenses | 211 | 235 |
| Contract liability | 577 | 647 |
| Other payables | 85 | 131 |
| | | |
| | 1,402 | 1,903 |
During the reporting period, for the Group, £647,000 of revenue was recognised that had been included in the contract liability at the beginning of the period.
COMPANY
| | | | 2024 | 2023 |
|
|
| | £'000 | £'000 |
| |
| | | |
| Trade payables |
| | 427 | 758 |
| Other tax and social security |
| | 80 | 112 |
| Accruals |
| | 199 | 207 |
| Contract liability |
| | 498 | 554 |
| Other payables |
| | 83 | 109 |
| Amounts owed to Group undertakings |
| | - | - |
| |
| | | |
| |
| | 1,287 | 1,740 |
During the reporting period, for the Company, £554,000 of revenue was recognised that had been included in the contract liability at the beginning of the period.
20. Share capital
| GROUP AND COMPANY | | |
|
| Shares | £'000 |
| Issued, called up and fully paid Ordinary shares of £0.002 each | | |
|
| | |
| At 30 June 2023 | 46,004,758 | 92 |
| Share issued | 280,000 | 1 |
| | | |
| At 30 June 2024 | 46,284,758 | 93 |
| | | |
| | | |
Shares issued
On 16 May 2024, 280,000 shares were issued to non-executive directors in lieu of salary. The shares had a nominal value of £0.002 per share and were issued at the market value on the date of issue of 10.5p per share, resulting in an increase in share capital of £560 and share premium of £28,840. The shares rank pari passu with the existing shares in issue.
On 6 December 2022, the company proposed an equity fundraise whereby qualifying existing shareholders were able to subscribe for new shares at an issue price of £0.33 on the basis of 11 offer shares for every 14 existing ordinary shares. Under the issue, open offer warrants were issued to the qualifying shareholders in relation to the purchase of shares on the basis of one warrant for every 3 open offer shares. The warrants may be exercised from the date of issue until 6 December 2026 at a price of £0.60 per share. On 6 January 2023 13,708,380 shares were admitted to the London Stock Exchange as a result of this open offer. A further 5,981,059 shares were admitted on 14 March 2023 after approval from the Financial Conduct Authority. A total of £6.5m was raised and 6,563,123 warrants were created.
Share price
The market value of the shares at 30 June 2024 was 13.00p (2023; 21.00p). The range during the year was 10.5p to 21.0p (2023; 20.5p to 57.5p ). Shareholders are entitled to one vote per Ordinary share held and dividends will be apportioned and paid proportionately to the amounts paid up on the Ordinary shares held.
Notes to the financial statements (continued)
21. Share based payments
GROUP AND COMPANY
The Group uses share options as remuneration for services of employees. The fair value is expensed over the remaining vesting period.
The fair value of options granted during the year has been arrived at using the Black-Scholes model. The assumptions inherent in the use of this model are as follows:
§ The option life is assumed to be at the end of the allowed period
§ There are no vesting conditions which apply to the share options/warrants other than continued service up to 3 years.
§ No variables change during the life of the option (e.g. dividend yield must be zero).
§ Volatility has been calculated over the 3 years prior to the grant date by reference to the daily share price.
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
| | 2024 WAEP | |
| |
| |
| | Number | Price (£) |
| |
|
|
| Outstanding at the beginning of the year | 630,000 | 0.3333 |
| Granted during the year | 825,300 | 0.1947 |
| | | |
| | | |
| Outstanding at the year end | 1,455,300 | 0.2813 |
| | | |
| Exercisable at the year end | 887,232 | 0.2640 |
| | 2023 WAEP | |
| | | |
| | Number | Price (£) |
| | | |
| Outstanding at the beginning of the year | 1,351,473 | 0.4437 |
| Granted during the year | 530,000 | 0.33 |
| Exercised during the year | - | - |
| Lapsed during the year | (1,251,473) | 0.3570 |
| | | |
| Outstanding at the year end | 630,000 | 0.3333 |
| | | |
| Exercisable at the year end | 630,000 | 0.3333 |
| | | |
Notes to the financial statements (continued)
Share based payments (continued)
The options outstanding at the year-end are set out below:
| Expiry date | Issue date | Exercise | | 2024 | 2023 | |||
| | | Price (£) | | | Share options | Remaining life (years) | Share options | Remaining life (years) |
| 10 year expiry | | | | |
|
| | |
| 24 November 2027 | 25 November 2017 | 0.4750 | Options | | 50,000 | 3 | 50,000 | 4 |
| 24 November 2027 | 25 November 2017 | 1.0000 | Options | | 50,000 | 3 | 50,000 | 4 |
| 3 year expiry | | | | |
|
| | |
| 8 June 2026 | 7 June 2023 | 0.33 | Options | | 530,000 | 2 | 530,000 | 3 |
| 18 September 2027 | 19 September 2024 | 0.16 | Options | | 180,000 | 2 | - | - |
| 25 April 2027 | 24 April 2024 | 0.13 | Options | | 315,300 | 3 | - | - |
| 4 year expiry | | | | |
|
| | |
| 24 April 2028 | 23 April 2024 | 0.13 | Options | | 90.000 | 4 | - | - |
| 24 April 2028 | 23 April 2024 | 0.33 | Options | | 240,000 | 4 | - | - |
| | | | | |
|
| | |
| | | | | | 1,455,300 |
| 630,000 | |
| | | | | | |
| | |
The total expense recognised during the year by the Group, for all schemes, was £26,301 (2023: £1,000).
Notes to the financial statements (continued)
22. Lease liabilities
Property, plant and equipment comprises owned and leased assets.
GROUP
|
| | 2024 | 2023 |
|
| | £'000 | £'000 |
| Right-of-use assets | | | |
| The group leases office buildings: | | | |
| Balance at 1 July | | - | 73 |
| Additions in the year | | - | - |
| Depreciation charge for the year | | - | (73) |
| Balance at 30 June | | - | - |
Total cash outflows of £nil (2023 £103,000) were made in relation to right-of-use assets in the current year with £nil interest (2023 £5,000).
23. Financial risk management
The Group and Company's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. This year the Group and Company are also exposed to global inflation risks. All companies within the Group apply the same risk management programme. Overall, this focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. Risk management is carried out by the Board and their policies are outlined below.
a) Market risk
Foreign exchange risk
The Group is exposed to translation and transaction foreign exchange risk as it operates within the USA and other countries around the world and therefore transactions are denominated in Sterling, Euro, US Dollars and other currencies. The Group policy is to try and match the timing of the settlement of sales and purchase invoices so as to eliminate, as far as possible, currency exposure. During the year, the weakening of Sterling has decreased the impact of movements in US Dollars.
The Group does not currently hedge any transactions and therefore there are no open forward contracts. Foreign exchange differences on retranslation of foreign currency monetary assets and liabilities are taken to the income statement.
GROUP
The carrying value of the Group's foreign currency denominated assets and liabilities are set out below:
|
| | 2024 | 2023 | |||
|
| | | Assets | Liabilities | Assets | Liabilities |
| | | | £'000 | £'000 | £'000 | £'000 |
| | | |
|
| | |
| US Dollars | | | 455 | 219 | 3,118 | 297 |
| Euros | | | 35 | 88 | 17 | 120 |
| Yen | | | 6 | - | 9 | - |
| Other | | | - | 12 | - | - |
| | | | | | | |
| | | | 496 | 319 | 3,144 | 417 |
| | | | | | | |
COMPANY
The carrying value of the Company's foreign currency denominated assets and liabilities are set out below:
|
| | 2024 | 2023 | |||
|
| | | Assets | Liabilities | Assets | Liabilities |
| | | | £'000 | £'000 | £'000 | £'000 |
| | | |
|
| | |
| US Dollars | | | 642 | 105 | 1,683 | 162 |
| Euros | | | 35 | 88 | 18 | 120 |
| Yen | | | 6 | - | 6 | - |
| Other | | | - | 12 | - | 22 |
| | | | | | | |
| | | | 683 | 205 | 1,707 | 304 |
| | | | | | | |
Notes to the financial statements (continued)
Financial risk management (continued)
Foreign exchange risk (continued)
The majority of the Group's financial assets are held in Sterling but movements in the exchange rate of the US Dollar and the Euro against Sterling have an impact on both the result for the year and equity. The Group considers its most significant exposure is to movements in the US Dollar.
Sensitivity to reasonably possible movements in the US Dollar exchange rate can be measured on the basis that all other variables remain constant. The effect on profit and equity of strengthening or weakening of the US Dollar in relation to sterling by 10% would result in a movement of:
Group: ±£63,000 (2023: ±£122,000).
Company: ±£69,000 (2023: ±£165,000).
Interest rate risk
The Group carries borrowings which are at fixed interest rates and as a result the directors consider that there is no significant interest rate risk.
b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order to minimise this risk, the Group endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of the outstanding amount:
Group: £460,000 (2023: £433,000).
Company: £230,000 (2023: £1,849,000).
Provision of services by members of the Group results in trade receivables which the management consider to be of low risk, other receivables are likewise considered to be low risk. The management do not consider that there is any concentration of risk within either trade or other receivables. The receivables are due from companies whose credit performance is constantly monitored and, if an amount becomes overdue, immediate action is taken to obtain payment. The population of clients is diverse, and this ensures no concentration of risk with any specific customer. A default is assumed and actioned when the Directors believe it will not be possible to obtain payment for the service supplied. This is not generally measured exclusively on the overdue period but judged on the basis of prior experience and the dialogue with the customer that follows the recognition of an overdue payment. For additional information on receivables see note 15.
Credit risk on cash and cash equivalents is considered to be small as the counterparties are all substantial banks with high credit ratings. The maximum exposure is the amount of the deposit.
c) Liquidity risk
The Group currently holds cash balances in Sterling, US Dollars and Euros to provide funding for normal trading activity. The Group also has access to additional equity funding, and, for short term flexibility, overdraft facilities would be arranged with the Group's bankers. Trade and other payables are monitored as part of normal management routine. Liabilities are disclosed as follows:
Notes to the financial statements (continued)
Financial risk management (continued)
Liquidity risk (continued)
GROUP
| 2024 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| | | | | |
| Trade payables | 447 | - | - | - |
| Accruals | 212 | - | - | - |
| Other payables | 83 | - | - | - |
| Borrowings | 10 | 9 | - | - |
| | | | | |
| 2023 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| |
| | | |
| Trade payables | 771 | - | - | - |
| Accruals | 236 | - | - | - |
| Other payables | 131 | - | - | - |
| Borrowings | 10 | 10 | 9 | - |
| | | | | |
COMPANY
| 2024 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| | | | | |
| Trade payables | 427 | - | - | - |
| Accruals | 199 | - | - | - |
| Other payables | 83 | - | - | - |
| Borrowings | 10 | 9 | - | - |
| | | | | |
| 2023 | Within 1 year | One to two years | Two to five years | Over five years |
| | £'000 | £'000 | £'000 | £'000 |
| |
| | | |
| Trade payables | 758 | - | - | - |
| Accruals | 207 | - | - | - |
| Other payables | 109 | - | - | - |
| Borrowings | 10 | 10 | 9 | - |
| | | | | |
d) Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in a volatile and tight credit economy.
The Group will also seek to minimise the cost of capital and attempt to optimise the capital structure, which currently means maintaining equity funding and keeping debt levels to insignificant amounts of lease funding. Share capital and premium together amount to £6,798,000.
During the year, the Group did not pay a dividend to shareholders (2023: £Nil). The Group continues to plan for growth, and it will continue to be important to maintain the Group's credit rating and ability to borrow should acquisition targets become available.
Capital for further development of the Group's activities will, where possible, be achieved by share issues and not by carrying significant debt.
Notes to the financial statements (continued)
Financial risk management (continued)
Liquidity risk (continued)
e) Inflation risk
Inflation risk refers to the risks posed to the Group due to rising inflation. This increase in inflation could lead to increasing costs and potentially decreasing revenue as companies seek to decrease their own costs. Management have considered these factors in preparing their going concern forecasts and will continue to monitor the level of expenses and revenue going forward.
24. Capital Commitments
GROUP AND COMPANY
At 30 June 2024 neither the Group nor the Company had any capital commitments (2023: £Nil).
25. Related party transactions
GROUP AND COMPANY
The remuneration paid to Directors is disclosed on page 16 of the Directors' Report. Shares held by the directors are disclosed on page 15. Subsequent to the year ended 30 June 2024, CF Pro Limited became a management entity of the Group and Company, by virtue of the provision of key management services. This relationship commenced in August 2024. During the year ended 30 June 2024, fees totalling £103,000 were paid to CF Pro Limited. There was an outstanding balance owed to CF Pro Limited of £8,000 at the year end. Transactions with related parties were carried out on an arm's length basis.
26. Events after the balance sheet date
There were no relevant events after the balance sheet date.
27. Accounts
Copies of these accounts are available from the Company's registered office at Suite 28, Ongar Business Centre, The Gables, Fyfield Road, Ongar, Essex, CM5 0GA or from Companies House, Crown Way, Maindy, Cardiff, CF14 3UZ.
and from the ADVFN plc website:
ENDS
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